Strategy

Alliance Magnesium’s ultimate objective is commercial production of magnesium using serpentine from abundant mine tailings.

In order to achieve successful commercial operations, development will include the three phases shown in the table below.

The first step will be the establishment of a continuous operation pilot plant to produce magnesium in order to optimize operating conditions. Alliance Magnesium intends to obtain substantial financial support from provincial and federal governments for this step, which will be completed over a period of 12 months.

The next step will be the construction of a pre-commercial operation plant. In this step, the electrolysis cell will be at full scale, and as is common practice in the industry, will be repeated as many times as required for full-scale plant operation.

Magnesium production from this pre-commercial plant will be used as qualification lots for the negotiation of off-take agreements with end users, such as automotive and aerospace industry players. With a planned production of 1,000 tonnes per year, this would allow many potential buyers and strategic partners to test our metal.

The equipment will be reused in the full-scale plant, and this investment should therefore be considered as a Phase 1 plant construction. At this step, assuming the markets are favourable, Alliance Magnesium should proceed with an IPO.

The final step will be the construction and commissioning of the 50,000-tpy plant. This step will require up to $535 million, and could be shared with strategic partners.

The 50,000-tpy capacity of this plant is relatively small compared to the size of the market, which is 1 million tonnes per year with approximately 5% annual growth. Given the potential global demand for magnesium sourced from a safe jurisdiction in North America, Alliance Magnesium’s clean technology and the availability of the resource from Quebec mine tailings, it is reasonable to expect that this plant could see its production capacity increase over the next decades.

Finally, Alliance Magnesium’s business case also includes the signature of strategic partnerships under any technology licensing.

Building the future

As its name implies, Alliance Magnesium is recruiting key players for the development of its technologies and commercial aspects, as well as for its financial needs. Its financial partners will sustain its capital requirements, having recognised its enormous potential of high return on investment.